Mortgage Temporary Buydown ROI Calculator

Stress-test a temporary mortgage buydown before closing. Enter the loan amount, base and reduced interest rates, premium due at closing, and the months the lower rate lasts to surface monthly payment relief, total savings, ROI, and the break-even window.

Mortgage principal you expect to borrow.
Annual interest rate without a buydown.
Year-one rate after applying the buydown.
Premium or discount points due at closing for the buydown.
Optional. Defaults to a 30-year amortization if left blank.
Optional. Defaults to 12 months of reduced payments for a 1-year buydown.

Payment savings are estimates; confirm with your lender before committing funds.

Examples

  • Loan $420,000, base rate 6.75%, buydown 5.25%, cost $4,000, 12-month window → Monthly relief $404.86; 12 months buydown window → $4,858.28 saved; ROI 21.46%; Payback 10 months.
  • Loan $350,000, base rate 7.10%, buydown 5.60%, cost $5,000, 9-month window → Monthly relief $456.00; 9 months buydown window → $4,104.00 saved; ROI -17.92%; Payback n/a.

FAQ

Can I analyze a 2-1 or 3-2-1 buydown?

Yes. Enter the rate for the first year and set the discount window to 12 months. Then rerun the calculation for each subsequent year with the adjusted rate to see the full ladder.

How is break-even timing calculated?

Payback divides the upfront premium by the monthly payment relief. If the buydown window ends before you recover the cost, the result is shown as not applicable.

What if I expect to refinance before the buydown expires?

Reduce the discount window to the number of months you plan to keep the loan so the savings and ROI align with your likely timeline.

Additional Information

  • Payments assume a fully amortizing fixed-rate mortgage with equal monthly installments across the selected term.
  • Savings multiply the monthly payment delta by the discount window you specify, capped by the remaining amortization term.
  • Payback is only displayed when the upfront premium is recovered within the chosen buydown window.
  • The calculator isolates principal and interest; add taxes, insurance, or HOA dues separately when framing total housing cost.

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